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Industry Spotlight > Broker Dealers

Another Benefit of Independence: Selectivity

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Things have been very busy lately and business is booming. There comes a time though when you need to take a breather. I decided I needed a vacation day, so I took one last Friday. While I was at home, I received a call on my cell phone from a prospective client I had spoken to months earlier.

He is a local business owner who said he was frustrated with his current advisory relationship. His current firm recently lost two of their three brokers and this client was subsequently “reassigned” (I love it when this happens) to another, less experienced broker. The client received a letter in the mail stating that the new broker would be calling within the next two weeks. Well, 4 weeks later…still no call.

The client called me to say he wanted to move his account to me if I was interested. I asked him to fax a statement so I could see what was in his account. We’ll see how it goes.

This is a story which repeats itself far too often. Some brokers have so many clients that they cannot properly serve the clients they have. Consequently, many clients are underserved and that’s where the independent advisor comes in. As an independent, you have complete autonomy when it comes to choosing how many clients you handle.

At larger firms, it is typical that the broker who hangs in there the longest ends up with the largest client base. When brokers depart, some clients follow, but others do not. Clients who are left behind are reassigned to a new broker. So brokers with longer tenures tend to inherit the most clients. That’s not how it works in the world of the independent advisor.

I began this journey without a “book” of business so I had to build it from scratch. Simply put, I had no clients and no assets to manage. In the beginning, things were lean. During this time, I had to be very aware of my cash flow. When your asset management compensation is derived strictly from fees, building your business is even more difficult. Ultimately, it was my financial planning fees which helped keep me afloat.

Now that the asset management revenue has grown to the point where it is the majority of my monthly income the pressure is off. Since the pressure is off I can be more selective in choosing clients.


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